Why Governor Newsom’s gas tax rebate proposal is a bad idea

Gov. Gavin Newsom floated the notion of a gas tax rebate for everyone who owns a car during his State of the State address last Tuesday.

It’s a bad idea. So is his notion — backed by Republicans — of a gas tax holiday.

No one wants to pay higher prices at the pumps. And while it’s true that California’s gas taxes are among the highest in the nation, numerous studies have shown that the health and environmental benefits outweigh the costs.

Higher prices at the pump encourage people to drive less and buy more electric and fuel-efficient cars. Discouraging consumption of fossil fuels and reducing greenhouse gas emissions should remain one of the state’s highest priorities. The price we pay for the impact of climate change on California is much higher than the increased costs at service stations.

A gas tax holiday would save motorists only a few pennies a gallon. And it would slow the state’s effort to improve its transportation infrastructure.

If the governor wants to help out low-income Californians who have long commutes to work and are already struggling to make ends meet, he should aim relief efforts at those who need them most, not at wealthier residents who can still afford to fill the tanks on their gas-guzzling SUVs and luxury vehicles.

Gas prices have been rapidly rising in recent weeks. The price per gallon of regular unleaded fuel in California hit $5.57 on Wednesday, a new record that is the highest in the nation and nearly a dollar more than a month ago, according to AAA. California’s state excise tax on gas stands at $51.1 a gallon. The Legislature in 2017 passed SB 1, the first gas tax increase in decades, raising the tax by 12 cents to pay for road and bridge repairs. Voters in 2018 rejected an effort to repeal the increase. In 2020, the tax started adjusting annually for inflation. Newsom is seeking to suspend the next inflation increase in July, but that tax “holiday” would only cut the price of a gallon of gas in California by pennies.

It’s hard to imagine that small of a decrease in gas prices — expected to be 3 cents a gallon — creating goodwill for Newsom with California voters over the long haul. But what it will do is negatively impact the pace of the state’s highway and bridge repairs.

In January, the governor introduced what he hailed as a historic $10 billion zeroemission vehicle (ZEV) package to accelerate the transition to zero-emission vehicles and fight climate change. The package was designed to shift the auto industry to all electric by 2035, “tackling the single largest culprit of pollution in California — the tailpipe.”

Newsom should continue his efforts to aggressively fight the impact of climate change. The governor should kill his idea for a gas tax holiday and rebate for all Californians